Traditionally the preserve of Christie's and Sotheby's, Beijing-based Poly Auction, the world's third largest auction house by sales, has followed compatriot China Guardian into Hong Kong, where there are nocapital gains or sales taxes.

And Zhao Xu, Poly Auction'sexecutive director, is bullish on the company's prospects.

"Overseas Chinese still prefer a big Chinese auction house run by Chinese people to help them sell their art works," he told the Financial Times.

Xu added that when it comes to Chinese art, "Chinese people know better".

This week Christie's is also hosting a series of major art auctions in Hong Kong. Chu Teh-Chun's 1987 work La foret blanche II highlighted the company's Asian 20th Century & Contemporary Art evening sale on November 24, with a $7.8m performance - a world record for the artist.

Sotheby's has recently entered the Chinese mainland market itself, through a joint venture with a state-owned company, yet Chinese art is one asset that it will not be selling.

The country's laws state that foreign auction houses are forbidden from selling antique Chinese artworks.